Venture Capital

We have discussed research supported by governments and conducted both
in universities and in national labs or government institutes, and in
the laboratories of several major corporate research labs, where most
of the fundamental ideas have arisen. The research and education
system is healthy, with teachers, students, conferences, and journals.
We have seen that both startup companies and the large corporations
are moving to bring systems into the market. The final participant in
a functioning ecosystem is capital: without money, companies cannot
grow and thrive.

Quantums-focused funds

At least two venture capital funds have been initiated, with funds of
around US$100M each, in the last few years. Mike Lazaridis, an
entrepreneur who founded Research in Motion (maker of the Blackberry
phone), not only has supported research at the University of Waterloo
and the Perimeter Institute, in 2013 he and Douglas Fregin started a
venture fund named Quantum Valley. The second, Quantum Wave Fund, has
offices in Boston, New York and Moscow, and was founded in 2012 with
an interest in quantum technologies, though its existing investment
portfolio does not yet include quantum computing startups.

Other funds

D-Wave has been supported both by the Canadian government and more
than fifteen different venture capitalists. Several rounds of funding
have been announced publicly over the years.

Long-established venture capitalists, including NEA and GV, have
invested in some of the startup companies we discussed in the last
article.

Services

Venture capitalists (VCs) do more than just provide money; they also
actively engage in the management of companies they fund, and connect
the inventors with potential customers and other members of the
venture capitalists’ network. The challenge for VCs is patience.
Most VCs are accustomed to time scales of just a few years for their
investments to pay off. In the Internet Age, many companies creating
services accessible through web browsers or providing apps for mobile
phones expect to have significant revenue streams and established
customers, if not necessarily profits, within a few months, making it
relatively easy to assess the value of and potential for the business.

Quantum technologies, in contrast, will require longer development
times (and larger dollar amounts) from idea to product. Because the
core technical concepts are alien to the classical computers, cell
phones and Internet services we are accustomed to, everyone from
customers to venture capitalists must learn new ways of assessing
value, learning to see the business case for deploying the technology
and recognizing what is technically feasible without always
understanding the technical details. If you are a potential customer
or investor, we hope that this course has provided you with some
understanding of the technology to assist you in these decisions.